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Introduction
The negative effects of coronavirus infection in the United States can be divided into three groups. First, increased costs of trade due to reduced tourism and physical volume of goods sold. Second, negative productivity shocks both on the supply side of goods and services, disruptions in production, reduced labor mobility, and transportation constraints, and on the demand side of reduced consumption and investment (Apergis and Apergis 1327). Third, an expansion of government spending, the costs of health care, and financial stimulation of the economy.
Discussion
It is essential to emphasize that the economic consequences of the pandemic are severe and are due in the main to inflation. At the end of 2020, the U.S. government’s long-term fixed-rate debt was nearly $21 trillion (Apergis and Apergis 1328). Also, the U.S. monetary base, which includes the amount of money in circulation, was about $5.2 trillion. While the monetary base takes the primary impact of 2021-2022 inflation, itself 12.4%, its unexpected 7.7% component lowers the value of U.S. government debt as interest is compensated to debt holders for anticipated inflation (Meyer et al. 530). Therefore, the U.S. Treasury gets a huge $2 trillion reduction of almost 11% of GDP in the real value of its $26 trillion inflation-prone liabilities.
Furthermore, 2021 has been the highest consumer price increase in the U.S. for the past 40 years. In December, prices of goods and services in the United States grew at an annualized rate of 7 percent, according to the Labor Department in Washington, D.C. Thus, it is the highest since 1982 (Meyer et al. 538). It is noteworthy that economists expected such a development even though in November, inflation in the United States was already 6.8 percent. Experts explain this situation as the lack of raw materials due to the coronavirus pandemic and high energy prices (Apergis & Apergis, 1330). Therefore, the general economic problems that arose after COVID-19 had a direct negative influence on the country’s population.
It is crucial to emphasize that after the COVID-19 pandemic, many problems developed, and the world entered 2020 already in a state of crisis. High and growing social inequalities meant that people who were deprived of resources from birth stood a good chance of having their rights, such as the right to adequate food and housing, diminished. Covid-19 caused an economic downturn around the world. However, its extent varied depending on where people lived. In the Netherlands and Germany, governments target low-income people by compensating them 90% of their lost wages if businesses do not lay off workers (Armantier et al. 444). Indonesia provides free treatment to all persons regardless of whether they have national health insurance. In other countries, the disadvantaged often face financial problems due to the economic crisis and inflation.
In the United States, a significant portion of the aid was temporary. In the early months, there was a reduction in poverty through the expansion of social support, but this largely disappeared in July. By October, the number of poor people in the country had risen by more than 8 million, based on the ratio of income to cost of living, and one in two households had trouble maintaining everyday expenses such as food or housing (Aspachs et al. 5). Millions of people have claimed that they cannot access health care because they have lost their insurance. In addition, from the beginning, assistance did not reach those in the informal sector or undocumented people (Perri et al. 717). Thus, the general decline in the economy primarily affected individuals who required social benefits. This led to increased economic inequality and the disintegration of social classes.
The current global recession will continue to produce powerful effects for a long time in the future. As governments continue to attempt to salvage their economies, they have to remember to ensure that aid reaches the millions of people who are barely hanging on to life (Paul et al. 7). It is important to ensure that everyone has food, shelter, and other basic necessities. It is also impermissible to limit the circle of recipients to the wealthy minority. The state needs to take unconventional measures to ensure an economic recovery that is fair and human rights-oriented, reducing rather than exacerbating inequality (Paul et al. 7). This cannot be realized without involving in decision-making those who have been hardest hit by the crisis and those who are the recipients of aid.
Conclusion
Furthermore, the restoration of the economy must be oriented toward human rights. This includes providing affordable health care for everyone and protecting labor rights. Moreover, it should not permit the dismantling of gains in the area of gender equality and guarantee the availability of decent and affordable housing and livelihoods, including water and sanitation (Lima et al. 5). Additionally, since the high level of housing is the main factor contributing to homelessness, it is imperative to reduce the level of homelessness. Accordingly, additional funding should be allocated for the construction of public shelters for the most vulnerable segments of the population. Such a recovery involves investing in public services and social safety nets. At the same time, the introduction or strengthening of equitable budget and tax regimes to finance programs aimed at the realization of each person’s right to a decent standard of living is important for the restoration of economic equality.
Works Cited
Apergis, Emmanuel, and Nicholas Apergis. “Inflation Expectations, Volatility and Covid-19: Evidence from the US Inflation Swap Rates.” Applied Economics Letters, vol. 28, no.15, 2021, pp.1327-1331.
Armantier, Olivier, et al. “How Economic Crises Affect Inflation Beliefs: Evidence from the Covid-19 Pandemic.” Journal of Economic Behavior & Organization, vol. 189, 2021, pp. 443-469.
Aspachs, Oriol, et al. “Tracking The Impact of COVID-19 on Economic Inequality at High Frequency.” PLoS One, vol, 16, no. 3, 2021, pp. 1-10.
Lima, Nádia Nara Rolim, et al. “People Experiencing Homelessness: Their Potential Exposure to COVID-19.” Psychiatry Research, vol. 288, 2020, pp. 1-10.
Meyer, Brent, et al. “The Impact of the COVID-19 Pandemic on Business Expectations.” International Journal of Forecasting, vol. 38, no. 2, 2022, pp. 529-544.
Paul, Ayan, et al. “Socio-Economic Disparities and COVID-19 in the USA.” Journal of Physics: Complexity, vol, 2, no. 3, 2021, pp. 1-10.
Perri, Melissa, et al. “COVID-19 and People Experiencing Homelessness: Challenges and Mitigation Strategies.” Canadian Medical Association Journal, vol. 192, 2020, no. 26, pp. 716-719.
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